National Defence Committee on April 1st, 2010

[Claude Bachand, Bloc, Saint-Jean, QC]

Could you also get the figures for the Victoria class submarines? These submarines have been purchased, but was provision made for in-service support for the Victoria class submarines?

[Dan Ross]

I will answer the Chinook question first. We are planning a total cost of a little over $2 billion for the 15 Chinook F's. That includes not just the contract with Boeing, but transportation, spare parts—

[Claude Bachand, Bloc, Saint-Jean, QC]

Acquisition.

[Dan Ross]

The total cost--contingency, everything--is slightly over $2 billion, and we're estimating slightly less than $3 billion for 20 years of support for Chinooks.

The submarines were a cost of $850 million for acquisition. The cost of a single new submarine is more than $1.5 billion. We had a $1 billion long-term contract in place for the major maintenance and refit of our submarines.

[The Chair, Conservative, Maxime Bernier]

Thank you, Mr. Bachand. You will have the opportunity to ask the remainder of your questions during a subsequent round of questioning.

I will now turn the floor over to Mr. Harris.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair.

Thank you, Mr. Ross, for joining us this morning. I too am interested in the joint support ships, or joint supply ships, as they have also been called. It seems to me that a lot of people were disappointed at the end of August 2009 when the government declared the bidders to be non-compliant and essentially cancelled that round of proposals.

My information was that the government long knew that the ships could not be built for the amount that had been designated back in 2002. Correct me if I'm wrong, I understand the figure was set by the government as to what the value of this project was back in 2002. These were shortlisted design projects going on in 2008.

My understanding was that the bidders had told the government that it could not possibly be done for that amount of money and that the government didn't take into account the cost drive—you call it your cost drive—and the fact that this cost had risen considerably since then. The whole thing ended up being...I call it cancelled, but obviously it's not cancelled. It has to be started again.

Is there a figure that has been set aside for this project now? If so, how can you be sure that this can be done within that figure? Are we cutting the garment to fit the cloth?

[Dan Ross]

I think there are several comments. First of all, the government has not reconsidered and taken a decision on the new re-procurement process, and I can't disclose a new estimated cost. That would be a cabinet confidence.

At the time, the market parameters were changing extremely rapidly, and it was difficult to predict where those bid prices were going to be. I know there is sort of public rumour, that people said this and said that, but having been there at the time, it wasn't clear to anyone.

I really can't comment further than that, because we have been served with a lawsuit by one of the firms in terms of the final payment. This particular issue is part of a judicial process, so it wouldn't be appropriate for me to go in to speculate when the Government of Canada has to talk to the company in court.

[Jack Harris, NDP, St. John's East, NL]

Fair enough on that point. I appreciate that and understand that.

Is there any timeline for a decision on this? I note your list here is quite interesting, but I have to say it's rather vague, because it's here's what we're going to do over the next 20 years, and then you have a list without any priorities or timelines.

Is there any sense of urgency with respect to the joint support ship? If there is, will it be taking priority over any of the other ones? Is there any order in which these things are going to be given priority?

[Dan Ross]

There is an order. As my minister said recently here, it is a top priority for him and he would like to bring that forward to government for a renewal of the policy base. Obviously, I need revised definition authority from the Treasury Board as soon as possible. On “as soon as possible”, I take that very seriously in terms of getting the documents ready.

[Jack Harris, NDP, St. John's East, NL]

Thank you.

I didn't see in the list here, although obviously there's been some public discussion about it, the helicopter acquisition, not the Chinooks but the Cyclones. Where are we with that particular project?

I have a particular question arising out of the incident that occurred off Newfoundland's coast last March with a Sikorsky 92A, which I believe is the same model basis, obviously with significant modification. One of the things resulting from that was the fact that this particular helicopter had gotten exempted from the 30-minute dry-run requirement for its operations. I believe there's been a statement by the minister that this is a specification that Canada will have. They will have to meet this 30-minute dry-run condition as part of that project.

Can you tell us how that's being achieved, and what effect that will have on this program? Will there be delays as a result of that, and how this is being managed?

[Dan Ross]

Thank you, sir.

The dry-run capability of our H-92 Cyclone will be fully certified and tested before we accept the aircraft. The program is going extremely well, actually. The air vehicle has been flying with very few problems since October 2008. It is a fairly significantly modified and upgraded version of an H-92. It is fly-by-wire, which takes the complex hydraulics and so on of flight control out of the aircraft. It has automatic rotor- and tail-folding capability. It is very sophisticated.

That program has been flying very well. They will be doing at-sea trials off HMCS Montreal next week in Halifax. We have landed the aircraft on our modified ships successfully and they have taken off successfully, and now we're going to do actual at-sea live motion in the wind conditions off HMCS Montreal.

I just have a broader comment about big, complex air programs like that. The track record shows that it takes about ten years to do one like that. The Europeans, for example, have really struggled with the NH90 maritime helicopter. It's extremely light.

We're at the five-year, three-month point, not counting the previous history of the CHs and all the rest of that stuff. We're at five years, three months of what typically takes ten years. In November, we're scheduled to take our first of six maritime helicopters to begin our training and operational testing phase of what we think is going to be an outstanding helicopter. And the program remains well under budget.

If you ask me if I am happy with the maritime helicopter project, yes, I am. Have there been challenges? Yes. Has it been an extremely difficult program? We have asked for things on that helicopter that no one else in the world has done. It will be, clearly, the best in the world, by a big margin. But the performance specifications, including run-dry capability, are very high standards to meet.

That's a long answer. I'm sorry.

[The Chair, Conservative, Maxime Bernier]

Thank you very much.

Now we'll give the floor to Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you, Chair.

Thank you, Mr. Ross, for joining us today.

I'll probably touch on a number of somewhat unrelated areas. The first is project managers. That has been a challenge, as we know. Do you have any comments on the use of retired expertise, people at senior levels who have some experience, obviously, who get out and then back in, in or out of uniform? Is it necessary for them to be in uniform? I'm thinking specifically of the next generation fighter project under Colonel Burt, as an example. Are we dipping into the recently retired ranks for help?

[Dan Ross]

Thanks, Mr. Hawn.

The retired aerospace engineer senior officers are a key talent pool for us. Some of those aerospace engineers, maritime engineers, and land engineers are the only ones who have the technical depth and experience needed. They are the only ones. You can't go out and find them or hire them from private industry. Many of the best in private industry actually have been in the military and have that understanding of the context.

It's not that a GD, for example, couldn't give me an excellent design engineer. It's understanding this town, the government process, the approvals, and how to deal with the ambiguity that comes with government in a democracy. Those senior, complex-project management skills are tough to develop. And if I didn't have serving colonels, navy captains, and some retired officers performing as complex project managers, we would be much worse off than we are.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

There is some angst in some quarters about people sort of double-dipping and coming back, but really, without those people, we'd be a lot worse off than we are in project management.

[Dan Ross]

Absolutely.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you.

I'll go back to budget 2010, first of all, and CFDS, Canada First defence strategy. We talked a little bit about expectations. CFDS was announced, and virtually everything in there said yes, this is all coming. It was made clear, I thought, that this was a 20-year program. So if somebody is looking at a project that was supposed to come out in the last five years, and they're wondering where it is after the second year, obviously there's a lack of understanding that this is a 20-year project or plan.

On the impact of budget 2010 on CFDS, do you see the reductions, starting now and in years three, four, and five, as a major hurdle?

[Dan Ross]

My understanding is that there is really no significant impact on the department until the year after we leave Afghanistan. We have augmented funding for the cost of operations, which won't end until after we leave.

I really don't have a sense in detail on how the department will manage going forward. My sense is that it will not. The government continues to have a very strong commitment to deliver within the four pillars of the CFDS. The department should be able to do that.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

We're again looking at a 20-year program.

[Dan Ross]

That's right.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Over a period of two or three years, it's not going to have a major impact.

[Dan Ross]

The impact of one budget isn't normally unmanageable, unless there's some major change.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

There was some earlier discussion about consultation with industry, the military industrial team, and so on. I think there may be some feeling out there that we should consult industry on operational requirements. What are the strengths of a military industrial type of team approach? What are the limitations on how far we can go or beyond which we should not go?

[Dan Ross]

Sir, I think it is a somewhat fine line. It's really important to consult early, as CADSI recommended. It's important to have transparency and predictability on where we're going.

For example, at the end of the day, General Leslie, the commander of the army, is accountable for the type of equipment that his soldiers need when they're in harm's way. To some degree, that accountability can't be shared.

It doesn't mean you can't seek good advice and get good ideas to understand whether it's a platform or components of platforms in Canada or technology that we should think about. It is a dialogue. I think the dialogue is actually pretty good. Can it become better? Perhaps it can.

At the end of the day, I think the commanders who are accountable for the execution of combat operations particularly need to have a major say in the requirements.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

One of CADSI's recommendations was obviously a single procurement minister of some description. Without trying to put you on the spot, the DND, Public Works, and Industry Canada team approach to it is what we're working with now. Would you see a separate procurement minister, for want of a better word, reducing bureaucracy or adding to bureaucracy? It may be tough for you to answer.